US added jobs, but that doesn’t mean companies are hiring
The US is adding jobs, but low hiring rate means workers still face a difficult search
The US economy added 162,000 jobs in August, far exceeding economists' expectations of 55,000. Yet for people actually searching for work, the labour market can still feel unusually difficult.
Economists say the hiring rate, which measures new hires as a share of total employment, offers a different view of how easily workers can move into new jobs. That rate has remained close to its lowest level since the Great Recession.
Kory Kantenga, LinkedIn’s economist for the Americas, likens the labour market to a sink.
Water level signifies total employment in the labour market. New hires are represented by water that flows into the sink, while quits, layoffs, and retirements represent water draining from it. If fewer employees are quitting, then the economy is able to create more jobs in spite of companies recruiting fewer employees.
This is exactly what has been going on in the low-hiring and low-firing labour market currently. Both hiring and quits have slowed down, but layoffs have stayed relatively low.
What we have is a labour market in which employment can increase without opening up many opportunities for job-seekers.
The national hiring rate still cannot tell every job seeker what their own prospects look like.
A marketing analyst, warehouse worker and home health aide may all face very different conditions even though they are looking at the same national employment figures, said Sneha Puri, an economist at Indeed Hiring Lab.
The figures also count replacement hiring. A company replacing a departing employee adds a hire to the statistics even though its overall workforce has not grown.
For someone seeking a job, however, both types of positions can be considered as opportunities.
Hence, employees who depend on information related to the national economy might not see the whole picture of their job search.
Dominique Alexander became aware of this after her contract position at Microsoft expired in 2021. For almost all of the next year she tried to find herself a stable position in the company, unaware that the company started laying off people and reduced the rate of hiring new people.
Nicholas Jenkins became aware of this after his contract with Amazon finished in late 2024. He expected to find himself a new job within a month or two, but he spent five months looking for one until he moved to Houston, where his professional contacts helped him find a new position.
